The economic downturn has reversed the positions of Abu Dhabi and Dubai's outdoor advertising markets.
Abu Dhabi outdoor advertising holds fast in downturn
Outdoor advertising prices in Abu Dhabi have held steady in the face of a global downturn in advertising revenues, according to industry leaders. Although the capital's market was not immune from the effects of the crisis, it was spared much of the property market-led advertising slump that took place in Dubai, said Ammar Sharaf, the chief executive of the Abu Dhabi-based Viola Communications, which runs V Outdoor. The economic downturn had reversed the positions of Abu Dhabi's and Dubai's outdoor advertising markets, sending Dubai's once astronomical prices below those in the traditionally more affordable capital, Mr Sharaf said. "In the beginning of the crisis, all commercial sectors, including advertising, were hit," he said. "But after March, we saw a lot of it coming back to advertising in general, and outdoor got a good share of it. "In Dubai, I would say that it is still suffering, because supply is extremely high for the need of the market. But Abu Dhabi, because there were not plenty of outdoor locations, the supply is a lot less than the demand. That's why we believe that the Abu Dhabi market will remain in a good position." Ahmed Ramy, the media director for V Advertising, Viola's advertising arm, said that at the height of last year's boom, prices for outdoor advertising in Dubai were five times the prices in Abu Dhabi. Rumours in the industry put the prices of some of the prime billboard locations on Sheikh Zayed Road at Dh10 million (US$2.7m). "Back then, if you wanted to book some location in Dubai, you have to look after it six months in advance," Mr Ramy said. "But now, they actually have plenty of availability. The demand is higher here [in Abu Dhabi] than it is in Dubai." V Outdoor's competitor in the Abu Dhabi outdoor market, Arabian Outdoor, is having a similar experience. Abdo Abdo, a senior account executive at the company, said his company had been giving free campaign extensions to its clients in Dubai, where outdoor prices went down by more than 50 per cent in the first quarter of this year compared with the same period last year. Although the Dubai market had bounced back in the second quarter, it was still down between 15 and 20 per cent on the same quarter last year, he said, requiring his company to add perks to sweeten the deal. "We didn't lower our prices, but we are giving a sort of incentive to clients that, if they book with us for two weeks, maybe we give them the third week for free, which is acting as a kind of discount," Mr Abdo said. In contrast, the company does not need to offer these deals in Abu Dhabi, where it conducts about half of its business in the UAE. "The Abu Dhabi market is still better than Dubai," he said. "So we are not giving big discounts in the Abu Dhabi market." However, some clients, used to getting discounts in Dubai, are demanding them unsuccessfully in Abu Dhabi, according to James Nelson, the sales director for V Outdoor. "We have had requests from big agencies asking for 40 per cent, 60 per cent discounts, which we refused," Mr Nelson said. "We just gave the normal 20 per cent discount, and we are at 70 to 80 per cent occupancy now.' Outdoor, which previously relied on the property sector for the majority of its advertising, has been among the hardest hit segments of the UAE's struggling advertising market, which saw a 26 per cent drop in overall advertising spending in the first six months of the year compared with the same period last year, according to the Pan Arab Research Centre. Like much of the rest of the industry, V Outdoor lost most of its property-related clients, such as Aldar, Sorouh and Tamweel, in the crisis. But it has managed to make up for them with a new slate of financial and government-related clients, such as Abu Dhabi Commercial Bank, Abu Dhabi Finance and Formula One. It also won two concessions from the Abu Dhabi Government, including a 15-year exclusive right to sell advertising on many of the capital's bridges, lampposts and bus shelters. While V Outdoor is not expecting to see growth in the market this year, it is optimistic about next year, when it is planning to bid for the concession for the development on Reem Island. "This year, we are hoping to remain stable," Mr Sharaf said. "But next year, because most of the most promising projects in Abu Dhabi are going to be delivered in 2010 and 2011, we expect more movement in the market, in terms of buying and selling real estate, and therefore more advertising." email@example.com